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Questions and Answers — What you've always wanted to know

What is a US Corporation?
A corporation is a joint-stock company with limited liability. A stock corporation can issue shares (stocks). The corporation belongs to the owners of the shares. The founder of the US stock corporation determines the amount of share capital but does not need to have the share capital at his or her disposal. In Florida in particular (unlike Germany), no documentation of this capital is required.

Who is entitled to establish a US Corporation? Any natural person or legal entity, independently of place of residence or nationality, is entitled to establish a corporation in the USA. The corporation must be established through a US registered agent. The founder of the corporation need not travel to the USA in order to establish the corporation. We provide an address for the establishment of the corporation and an office address in the USA (not a post office box), both of which are absolutely required for US corporations. We also process all of the corporation's correspondence and forward its communications between the USA and Europe.

The name of the corporation
If the name you choose has not already been assigned to an existing corporation, almost any name of your choice may be used for a corporation, with a few exceptions. In contrast to Europe, the choice of a name for a corporation in the USA is left entirely to the founder. The name chosen in the USA for a corporation can be also be used in Europe for a subsidiary, branch, local office, subsidiary GmbH or Co. KG. The name should indicate that it is a corporation (i.e. it should end with "Inc." or "Corporation")

Establishing a GmbH, Ltd. or US Corporation
The tax-free status of companies established in England and operating outside of England was abolished some time ago. Today, a so-called "Europe GmbH" pays taxes in Europe as well — in fact, just about the highest taxes in Europe. It is impossible to establish an Ltd. company in England anonymously, by contrast to the USA. A US corporation pays taxes in the USA, i.e. the minimum amount of $150 per year. In case the European public authorities request information about the corporation, it is thus able to prove that it genuinely exists in the USA. In the case of an Ltd. company, the European factory inspectorates very quickly detect whether it actually exists in England or only exists on paper. In other words, an Ltd. company’s commercial activity can be prohibited relatively quickly in England. A corporation that is founded in the USA does not to have to face this problem.

In conclusion, the foundation of an Ltd. company in England does not bring the founder any advantages whatsoever. By contrast, a US corporation can be registered in Europe as well and is highly respected all over the world. By contrast to the European requirements for a GmbH company, in a US corporation a single person can perform all of its corporate functions — that is, he or she can be the owner, partner and president or managing director all in one.

Obviously, a company aims to pay the lowest possible amount of taxes. In this respect, yet another key advantage is offered by US law compared to the GmbH law and German corporate tax regulations, in addition to the possibility of establishing a company anonymously. If a US corporation provides services, issues invoices and deposits its revenues in US bank accounts, it is taxed at a rate between 15% and a maximum of 34%. This represents a significantly lower tax burden.

US Ccorporation = flexible operations
Every properly registered US corporation can conduct business operations and establish subsidiaries all over the world. In order to operate outside the USA, the corporation requires a document known as an APOSTILLE, which is issued by the Secretary of State in Florida. This certificate is based on the Convention de la Haye (Den Haag) of October 5, 1961. According to the German Minister of Justice, "Public certificates issued abroad that are to be used in the FRG and to which an ’apostille’ has been attached for this purpose do not require any additional authorization. The apostille is a formal document in which the genuineness of the certificate is affirmed by the authorized public agency in the country in which the certificate has been issued, in accordance with Article 3 of the Convention de la Haye (Den Haag) of October 5, 1961 on the exemption of public certificates issued abroad from FRG legalization procedures (Bundesgesetzblatt 1965 II, page 875)."

The US-Corporation is listed in the US register of companies, and after it has been formally registered as such in Germany it is treated like a German company. Similar procedures apply in other European countries. Corporations established in the USA can conduct many kinds of business operations. These are entered into the corporation's foundation document under the "purpose clause". The various activities of a US corporation do not have to be reported in any way to the public authorities. A "general purpose clause" permits the corporation to conduct all of the business operations that may be pursued in the USA without any specific formal permission.

Liability
The owners and directors of a US-Corporation can never be held liable forthe activities and obligations of the corporation. US law permits the president and the directors of a corporation to be exempted from liability in the corporation's foundation statutes. "Piercing the corporate veil" with regard to the managing director is also not possible as long a corporation has properly paid its US taxes and has not violated any currently applicable US laws.

Liability to pay tax
We can not, and are not permitted to, provide any tax consulting. A corporation that is registered in the USA and has its headquarters there is entitled to operate from the USA, send invoices from the USA to its customers and thus pay US taxes on its profits. US federal corporate income tax for active corporations is 15% on net profits up to $50,000. The tax rate rises progressively to a maximum tax rate of 34%; for net profits of €10 million or more the maximum tax rate is 36%. In the state of Florida there is no sales tax, value added tax or trade tax. Only if you would like to sell products to end consumers in Florida do you have to charge your customers sales tax and pass it on to the state.

Anonymity
In the state of Florida, the owner (or shareholder) of a US corporation is permitted to remain anonymous. This means that nobody knows who the actual owner of the corporation founded in Florida actually is, not even the US authority in charge of the establishment of corporations. Only the registered agent knows the identity of the corporation's owner. The president and the secretary of the corporation are officially listed.

Place of establishment & share provisions
We recommend the state of Florida as the best place to establish a US corporation. The fees for establishing a corporation are very inexpensive there, and both anonymity and one-person corporations are legally permitted. On account of the tax advantages and other legal advantages (for foreigners), we strongly recommend Florida for establishing US corporations. In addition to the fees for establishing a corporation (see the updated list of fees), you will also have to pay monthly administrative costs for the office service.

The corporation's shares are stamped with the value of the capital share in US dollars and the official name of the corporation.

What are the advantages of a US-Corporation?
Documentation of start-up capital is not required
Capitalization and stock market flotation are possible
Tax advantages
Anonymity for the owner
Exemption from liability
Asset protection
No inheritance tax

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